New Frontiers - Against All Odds Series: CFA Exams & The Devaluation of the Naira

"I wrote my CFA Level 1 exams when the exchange rate was N360 - $1" - Frank Nnamka

We were privileged to have an interview with a CFA Level 3 Candidate- Frank Nnamka. Frank was able to share with us what his thoughts are on the Devaluation of the Naira and the CFA Candidate.

Share your thoughts on what the effects of the Devaluation of the Naira are on the Nigerian CFA Candidate

For candidates, the concern is the cost they incur. As naira devalues, it becomes increasingly expensive to enrol for the CFA Exams. It is saddening that as the Naira is devaluing, salaries are not growing in direct proportion for some jobs and it means that candidates who have the will and desire to write the exams do not have the capacity due to the high cost. For example, I wrote my level 1 exams in 2019 when the Naira was N360 to a dollar but regardless I still had to take a loan against my salary to register for the exams. Now imagine what those trying to register for the exams now have to go through with the current exchange rate except they get help from probably father, mother, a close relation or take a loan but taking a loan now is also higher than what I had to get then. So really the cost is high for candidates and this will affect the level of enrolment to the charter and might force candidates to settle for lesser certifications.

With the rising need for CFA Charterholders in the country, do you think companies will invest in getting their employees chartered?

There are some firms that actually appreciate knowledge who offer full refunds to their employees on the expenses they incur in earning the charter or writing any level of the exams. But other firms do not.

Could you share possible solutions for the Nigerian Candidate?

I have some ideas that I have joggled in my mind though I never really got to implement them. One of which is to start a dollar mutual fund and save up months before the time to register for the exams. Saving in dollars for the CFA Exams ensures that you don’t get too affected by the devaluation of the Naira in the future. If the Nigerian candidates wait till the time of registration, they will find out most times that they are paying a lot more than they would have if they saved earlier with a dollar mutual fund account.

With the current economic depletion in Nigeria, what role(s) does the CFA Charter holder play in the narrative?

The first thing that is noteworthy is “Upholding the Integrity of the finance and investment industry” The level of knowledge you gain as a candidate while undergoing the training to earn the CFA Charter upskills you in terms of Ethics and Professional Standards.

I was quite naive when I was first exposed to the Stock Market and I made some very poor decisions. Now that I am enrolled in the CFA program, I see a lot of flaws in those actions and can not make such uninformed decisions again. This tells you how the market should be traded based on information rather than sentiments. And this is a major knowledge gap the CFA Institute and Charterholders are playing crucial roles in filling globally.

A downside is, most Nigerians, after earning the charter are considering relocating due to the ineffective systems in the country. The CFA charter opens you to global opportunities and once you want to be better off, you are compelled to consider taking opportunities outside the country. And I don’t see this reducing anytime soon.

I will say Firms in the investment and Finance industries should begin to expand their structures to accommodate the expertise of Charterholders.

Seeing the increase in the cost of earning the Charter, should we expect a reduction in interest and participation from Nigeria?

For those who are dedicated to earning the Charter, I do not see the devaluation of the Naira as a major setback. For example, I had to take loans while I was writing my level 1 and 2 exams. I could have just waited till I thought I could afford it, but the determination pushed me. By the time I was writing my Level 3, I could comfortably pay for the exams. So if anyone has the interest and is determined, the naira devaluation, although a major influence, should not be a setback.

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